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National Insurance Contributions Bill


National Insurance Contributions Bill

1

 

A

Bill

To

Make provision in connection with the upper earnings limit for national

insurance contributions (including in particular provision about the upper

accrual point). 

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and

consent of the Lords Spiritual and Temporal, and Commons, in this present

Parliament assembled, and by the authority of the same, as follows:—

1       

Amount to be specified as upper earnings limit: Great Britain

(1)   

In section 5 of the Social Security Contributions and Benefits Act 1992 (c. 4)

(earnings limits and thresholds for Class 1 contributions)—

(a)   

in subsection (1), omit the words from “which” to the end, and

(b)   

omit subsection (3) (amount to be specified as upper earnings limit).

5

(2)   

In section 176(1) of that Act (statutory instruments subject to the affirmative

procedure), after paragraph (za) insert—

“(zb)   

regulations under section 5 specifying the upper earnings

limit;”.

(3)   

The amendments made by subsections (1)(b) and (2) have effect in relation to

10

regulations specifying the upper earnings limit for 2009-10 or any subsequent

tax year.

2       

Amount to be specified as upper earnings limit: Northern Ireland

(1)   

In section 5 of the Social Security Contributions and Benefits (Northern

Ireland) Act 1992 (c. 7) (earnings limits and thresholds for Class 1

15

contributions)—

(a)   

in subsection (1), omit the words from “which” to the end, and

(b)   

omit subsection (3) (amount to be specified as upper earnings limit).

(2)   

In section 172 of that Act (control of regulations and orders), after subsection

(11ZA) insert—

20

“(11ZB)   

A statutory instrument containing (whether alone or with other

provisions) regulations under section 5 specifying the upper earnings

 
Bill 754/3
 
 

National Insurance Contributions Bill

2

 

limit shall not be made unless a draft of the instrument has been laid

before and approved by resolution of each House of Parliament.”

(3)   

The amendments made by subsections (1)(b) and (2) have effect in relation to

regulations specifying the upper earnings limit for 2009-10 or any subsequent

tax year.

5

3       

Additional pension: upper accrual point to replace upper earnings limit from

2009-10

(1)   

The Social Security Contributions and Benefits Act 1992 (c. 4) is amended as

follows.

(2)   

In section 22(2B) (earnings factors), for “the flat rate introduction year” (in both

10

places) substitute “2009-10”.

(3)   

In section 44(7)(c) (category A retirement pension), for “the flat rate

introduction year” (in both places) substitute “2009-10”.

(4)   

In section 122 (interpretation)—

(a)   

in subsection (1), for the definition of “the upper accrual point”

15

substitute—

““the upper accrual point” is £770;”,

(b)   

after subsection (6) insert—

“(6A)   

The Treasury may by regulations prescribe an equivalent of the

upper accrual point in relation to earners paid otherwise than

20

weekly (and references in this or any other Act to “the

prescribed equivalent”, in the context of the upper accrual

point, are to the equivalent prescribed under this subsection in

relation to such earners).

(6B)   

The power conferred by subsection (6A) includes power to

25

prescribe an amount which exceeds by not more than £1 the

amount which is the arithmetical equivalent of the upper

accrual point.”, and

(c)   

omit subsections (7) and (8).

4       

Consequential amendments and repeals

30

(1)   

Schedule 1 contains consequential amendments.

(2)   

Schedule 2 contains repeals.

5       

Extent

(1)   

Sections 1 and 3 extend only to England and Wales and Scotland.

(2)   

Section 2 extends only to Northern Ireland.

35

(3)   

Sections 4, 6 and 7 and this section extend to each part of the United Kingdom.

(4)   

But an amendment or repeal contained in either Schedule has the same extent

as the provision amended or repealed.

 
 

National Insurance Contributions Bill

3

 

6       

Commencement

(1)   

Subject to subsection (2), this Act comes into force at the end of the period of

two months beginning with the day on which it is passed.

(2)   

Sub-paragraph (3) of paragraph 6 of Schedule 1, and Schedule 2 so far as

relating to the repeals mentioned in that sub-paragraph, come into force on the

5

day appointed by an order under section 30(2) of the Pensions Act 2007 (c. 22)

for the coming into force of paragraph 45(2) of Schedule 4 to that Act.

7       

Short title

This Act may be cited as the National Insurance Contributions Act 2008.

 
 

4

National Insurance Contributions Bill
Schedule 1 — Consequential amendments

 

Schedules

Schedule 1

Section 4

 

Consequential amendments

Social Security Contributions and Benefits Act 1992 (c. 4)

1          

The Social Security Contributions and Benefits Act 1992 is amended as

5

follows.

2          

In section 22 (earnings factors), after subsection (8) insert—

“(9)   

References in this Act or any other Act to earnings factors derived

from so much of a person’s earnings as do not exceed the upper

accrual point or the upper earnings limit are to be read, in relation to

10

earners paid otherwise than weekly, as references to earnings factors

derived from so much of those earnings as do not exceed the

prescribed equivalent.”

3     (1)  

Section 23 is amended as follows.

      (2)  

In subsection (3)(a), for “subsection” substitute “subsections (3A) and”.

15

      (3)  

After subsection (3) insert—

“(3A)   

For the purposes specified in section 22(2)(b) (additional pension),

subsection (3)(a) has effect in relation to 2009-10 and subsequent tax

years as if the reference to the upper earnings limit were to the upper

accrual point.”

20

4     (1)  

Section 44A (deemed earnings factors) is amended as follows.

      (2)  

In subsection (1)(a), for “the upper earnings limit” substitute “the applicable

limit”.

      (3)  

After subsection (5) insert—

“(5A)   

In subsection (1)(a) “the applicable limit” has the same meaning as in

25

section 44.”

5          

In section 44B(2)(a) (deemed earnings factors: 2010-11 onwards), for “the

applicable limit” substitute “the upper accrual point”.

6     (1)  

Paragraph 1 of Schedule 1 (Class 1 contributions where earner employed in

more than one employment) is amended as follows.

30

      (2)  

In sub-paragraph (3) (as it has effect without the amendments made by

paragraph 45(2) of Schedule 4 to the Pensions Act 2007 (c. 22))—

(a)   

in paragraph (b), for “the current upper earnings limit” (in both

places) substitute “the upper accrual point”,

 

 

National Insurance Contributions Bill
Schedule 1 — Consequential amendments

5

 

(b)   

after that paragraph insert—

“(ba)   

if paragraph (b) applies, the amount obtained by

applying the main primary percentage referred to

in paragraph (d) to such part of the aggregated

earnings attributable to COMPS service as, when

5

added to the APPS earnings (if any), exceeds the

upper accrual point and does not exceed the

current upper earnings limit,”,

(c)   

in paragraph (c), for “the current upper earnings limit” (in both

places) substitute “the upper accrual point”, and

10

(d)   

after that paragraph insert—

“(ca)   

if paragraph (c) applies, the amount obtained by

applying the main primary percentage referred to

in paragraph (d) to such part of the aggregated

earnings attributable to COSRS service as, when

15

added to the APPS earnings or the part attributable

to COMPS service (or both), exceeds the upper

accrual point and does not exceed the current

upper earnings limit,”.

      (3)  

In sub-paragraph (3) (as amended by sub-paragraph (2) above and by

20

paragraph 45(2) of Schedule 4 to the Pensions Act 2007 (c. 22))—

(a)   

omit paragraph (ba),

(b)   

in paragraph (c)—

(i)   

omit “if some of the aggregated earnings are attributable to

COSRS service,”, and

25

(ii)   

for “the current upper earnings limit” substitute “the upper

accrual point”, and

(c)   

in paragraph (ca), omit—

(i)   

“if paragraph (c) applies”, and

(ii)   

“, when added to the APPS earnings or the part attributable

30

to COMPS service (or both),”.

      (4)  

After sub-paragraph (10) insert—

   “(11)  

In relation to such earners, any reference in this paragraph to the

upper accrual point is to be read as a reference to the prescribed

equivalent (see section 122(6A)).”

35

      (5)  

The amendments made by sub-paragraphs (2) and (4) have effect in relation

to 2009-10 and subsequent tax years.

Pension Schemes Act 1993 (c. 48)

7          

The Pension Schemes Act 1993 is amended as follows.

8     (1)  

Section 8 (meaning of “contracted-out employment” etc) is amended as

40

follows.

      (2)  

In subsection (2), in the definition of “minimum payment”, for “the current

upper earnings limit” substitute “the applicable limit”.

      (3)  

After that subsection insert—

“(2A)   

In subsection (2) “the applicable limit” means—

45

 

 

National Insurance Contributions Bill
Schedule 1 — Consequential amendments

6

 

(a)   

in relation to a tax year before 2009-10, the upper earnings

limit;

(b)   

in relation to 2009-10 or any subsequent tax year, the upper

accrual point.”

9          

In section 12B(7) (contracted-out pension scheme: reference scheme), in the

5

definition of “the applicable limit”—

(a)   

for “the flat rate introduction year” (in both places) substitute “2009-

10”, and

(b)   

in paragraph (b), after “point” insert “multiplied by 53”.

10    (1)  

Section 41 (reduced rates of Class 1 contributions for members of salary

10

related contracted-out schemes) is amended as follows.

      (2)  

In subsection (1) for “the applicable limit for that week” substitute “the

upper accrual point”.

      (3)  

Omit subsection (1ZA).

      (4)  

The amendments made by this paragraph have effect in relation to 2009-10

15

and subsequent tax years.

11    (1)  

In section 42A(1) (reduced rates of Class 1 contributions, and rebates, for

members of money purchase contracted-out schemes), for “the current

upper earnings limit for that week” substitute “the upper accrual point”.

      (2)  

The amendment made by sub-paragraph (1) has effect in relation to 2009-10

20

and subsequent tax years.

12    (1)  

In section 45(1) (personal pensions: amount of minimum contributions), for

“the current upper earnings limit for that week” substitute “the upper

accrual point”.

      (2)  

The amendment made by sub-paragraph (1) has effect in relation to 2009-10

25

and subsequent tax years.

13    (1)  

Paragraph 2 of Schedule 4 (priority in bankruptcy etc: employee’s

contributions to occupational pension scheme) is amended as follows.

      (2)  

In sub-paragraph (5), in paragraph (b) of the definition of “reckonable

earnings”, for “the applicable limit” substitute “the upper accrual point”.

30

      (3)  

Omit sub-paragraph (6).

      (4)  

The amendments made by this paragraph have effect in relation to

payments made in a tax week falling in 2009-10 or any subsequent tax year.

 

 

 
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